LTV

LTV stands for Customer Lifetime Value. It's a metric used in marketing and business analysis to measure the total revenue a customer is expected to generate for a company over the entire duration of their relationship with that company. It estimates the long-term value of a customer to a business. It's calculated by multiplying customer value (average revenue per customer) by the average customer lifespan. LTV = AOV x Average customer lifespan x Average purchase frequency Understanding LTV helps businesses make informed decisions about customer acquisition, retention strategies, and marketing investments. By increasing LTV, companies can improve profitability and sustainable growth.